Berlin Getting Into Election Gear

Can the polls be won on the euro rescue?

Clearly, the future still does not look rosy for the Eurozone. But three years into the euro crisis, Angela Merkel, whose global recognition has skyrocketed in the course of the crisis, remains in surprisingly good shape. As many times as worries that the euro rescue will ultimately fail might have kept her up at night over this past year — she doesn’t look it.

From afar, poor old Europe looks in a dire state. Catching up with post election Washingtonians a couple of weeks ago, most of my interlocutors came up with the full list of Continental woes: economic stagnation, recession and record unemployment in Eurozone countries (Chancellor Merkel’s austerity has clearly failed); riots and strikes in Europe (the end of the peace project?); Britain on the way to leaving the Union (a clear sign of disintegration); an inward-looking Europe (but oh well, Europe’s lack of ambitions to contribute to a stable world order are old hat).

To be fair, Washington’s analysts were still in a kind of fighting mode, having just been through a long and polarizing election battle. Even with Obama's second go being settled there is still the fiscal cliff looming and the immobile political institutions. The whole transatlantic exchange felt a bit like a collective lay-down on the therapist's coach to work through the traumas of the past year — and those still to come. The only comfort comes from our familiarity with each other’s sorrows, but these days we struggle to be able to reassure each other that things will be okay.

Clearly, the future still does not look rosy for the Eurozone. But three years into the euro crisis, Angela Merkel, whose global recognition has skyrocketed in the course of the crisis, remains in surprisingly good shape. As many times as worries that the euro rescue will ultimately fail might have kept her up at night over this past year — she doesn’t look it. And for good reason: At home, an impressive 70 percent of Germans believe in her ability to sort out the crisis, many of them not traditional CDU voters. Needless to say, Germans are in a good mood overall: Crisis, what crisis? It is empowering to know that your country actually has the clout to influence decisions in Brussels. By the end of 2013, Angela Merkel can also look back at a year in which she managed to tame the critics within her own coalition. At EU level, however, her ability to frame the euro rescue has been challenged: by a Socialist French president who made it into power on a “there is an alternative Europe” platform, by Italy having reentered the arena now that those unfortunate Berlusconi years are over, by an inevitable new role for the European Central Bank, and, not least, by the growing pressure created by facts on the ground in Eurozone countries hit hard. But again, doesn’t everybody agree that there will be no solution without Berlin, and doesn’t that give the German capital the key to many of the decisions that need to be taken?

Domestically, in 2013, parameters will change. Angela Merkel will have to build the “new” Eurozone, contours of which have emerged over the last months, while battling to win the Bundestag at home. Imagine Barack Obama and Mitt Romney in a full swing campaign for the White House while simultaneously having to work on a big constitutional re-balancing of powers within the US federal system — which is precisely what Angela Merkel needs to do now. The Eurozone can only be rescued by a major step of further Europeanization, which will mean that Germany, Spain, France, Finland and all its other members will have to swallow another round of trims to their nations’ sovereignty. The Eurozone is not only a fragile entity at the moment, its governance structures are a moving target. How can Angela Merkel possibly explain this to her voters, and win the 2013 federal elections on the vague promise of a bright future for the Eurozone?

Well, given her current approval rates she might still do well, provided that Germans continue not to be affected by the crisis before autumn, when voters head to the ballot box. And much will depend on what the opposition has to offer. So far, there has not been much bite to the Social Democratic and Green opposition parties. Only the Left Party has undamentally challenged the government’s euro policies.

But the other opposition parties are getting into election gear: Both the Social Democrats and Greens have nominated their candidates who will challenge the chancellor, and their campaigns are being defined at the moment. What they are likely to confront Merkel with is her mantra of “TINA,” which the chancellor has repeated on many occasions over this past year. Indeed, there is no alternative to fixing the dysfunctional currency Union if we are to rescue the euro. But of course there are a lot of different ways how to do it.

Both Social Democrats and Greens, while committed to keeping the euro alive, are likely to play the social Europe card. While this is a natural topic for the SPD, the Greens, too, have started to push social policy as one of the main pillars of their 2013 campaign. Chancellor Merkel herself set the pace by announcing earlier this year that she will make Europe part of her 2013 campaign. Many politicians, including in her own party, perhaps secretly wish to avoid this sensitive issue on Germany’s marketplaces next year. It is unlikely though that this will work: The euro question is out there, and Germans want to have a say on the future direction of the currency Union and Germany’s role in Europe.

2013 will be the first real election on European Union matters in Germany, and by the fall of next year, Europeans traveling to Washington with the election results will have a much clearer idea of what is feasible on the euro front. Whether this is good news or not remains to be seen, but one should not underestimate the strength of the foundation that the European idea is built on in Germany. Following the 2013 elections there will be a different European Union, but the end of the Union is not a realistic prospect.

ALMUT MÖLLER heads the Alfred von Oppenheim Center for European Policy Studies at the DGAP.

11/08/2014

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